Red Stripe Prevails in Alcohol Beverage Labeling Class Action

The latest merits decision in the ongoing false advertising/labeling class actions appears here. This case involves allegations that the labeling and marketing of Red Stripe Beer misleads consumers into thinking they are purchasing beer made in Jamaica from Jamaican ingredients. In fact, production of Red Stripe for the US market moved to the US in 2012. The Southern District of California’s Dumas v. Diageo PLC decision to dismiss the plaintiffs’ case gives hope that companies with alcohol beverage brands originating overseas can produce those brands in the US without facing significant litigation risk.

The plaintiffs brought their case under several California statues and also alleged negligent and intentional misrepresentation. Central to the plaintiffs’ allegations were statements on Red Stripe’s secondary packaging and labeling that the beer was a “Jamaican Style Lager” and contained “The Taste of Jamaica.” The plaintiffs also pointed to the labeling and packaging’s continued display of the original Jamaican brewer’s logo as evidence of deception. Finally, the plaintiffs pointed to the label’s statement that the beer “embodied the spirit, rhythm and pulse of Jamaica and its people.” Of course, the labels and secondary packaging did disclose that the US market beer was brewed and bottled in Latrobe, Pennsylvania.

Looking only at the complaint and before any discovery, the court dismissed the case, concluding that “no reasonable consumer would be misled into thinking that Red Stripe is made in Jamaica with Jamaican ingredients based on the wording of the packaging and labeling.” More specifically:

The mere fact that the words “Jamaica” and Jamaican” appear on the packaging does not support a conclusion that consumers would be confused about the origin and ingredients of the beer.

The statements on Red Stripe were similar to those made with respect to a “Swiss Army knife” – just as “Swiss” modified “Army,” in this case “Jamaican” modifies “Style” and does not connote the actual place of production.

Red Stripe’s display of “Jamaican Style” and similar claims are similar to Blue Moon making a “Belgian-Style Wheat Ale” and Harpoon making a “Belgian Style Pale Ale.”

“Taste of Jamaica” is too vague and meaningless to form the basis of a false advertising claim.

Red Stripe presents different facts from the facts that give rise to the false advertising case involving Beck’s Beer, where the labeling and packaging stated “Originating in Germany,” “brewed under the German Purity Law of 1516,” and “German quality.”

Even though consumers may have already held an expectation that Red Stripe is brewed in Jamaica based on past production on the island, no legal authority places a duty on marketers to counter such pre-conceived notions.

On the basis of this reasoning, the court dismissed the plaintiffs’ complaint as a matter of law. It did, however, dismiss the case “without prejudice,” which will give the plaintiffs 15 days (until April 21, 2016) to assert new claims that might survive dismissal.

The Dumas opinion represents merely one battle won (at least temporarily) in what will no doubt prove a long war over alcohol beverage labeling in the United States. Nevertheless, it provides helpful reasoning that may eventually influence other courts and provide guidance to marketers in the future.